FREMONT, Calif. — February 19, 2020. SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in smart energy, today announced its financial results for the fourth quarter and year ended December 31, 2019.
Fourth Quarter 2019 Highlights
- Record revenues of $418.2 million
- Record revenues from solar products of $389.0 million
- GAAP gross margin of 34.3%
- GAAP gross margin from sale of solar products of 37.3%
- Non-GAAP gross margin from sale of solar products of 37.8%
- Record GAAP net income of $52.8 million
- Record Non-GAAP net income of $87.4 million
- Record GAAP net diluted earnings per share (“EPS”) of $1.03
- Record Non-GAAP net diluted EPS of $1.65
- 1.6 Gigawatts (AC) of inverters shipped
Full Year 2019 Highlights
- Revenues of $1.43 billion
- Revenues from solar products of $1.34 billion
- GAAP gross margin of 33.6%
- GAAP gross margin from sale of solar products of 35.8%
- Non-GAAP gross margin from sale of solar products of 36.2%
- GAAP net income of $146.5 million
- Non-GAAP net income of $233.2 million
- GAAP net diluted earnings per share (“EPS”) of $2.90
- Non-GAAP net diluted EPS of $4.44
- 5.6 Gigawatts (AC) of inverters shipped
“We are pleased to conclude another very successful year with revenues growth of over 50% in 2019 most of which was generated by our solar business. We also announce a non-GAAP net profit growth of over 48%,” said Zvi Lando, CEO of SolarEdge. “This year, we continued to expand our solar business and also made significant investments in our acquired businesses that open new opportunities for us to expand our product offerings into adjacent segments and leverage our highly talented technological teams to become leaders in those markets.”
Fourth Quarter 2019 Summary
The Company reported record revenues of $418.2 million, up 2% from $410.6 million in the prior quarter and up 59% from $263.7 million in the same quarter last year.
Revenues related to the solar business were $389.0 million, modestly up from $387.8 million in the prior quarter and up 60% from $243.4 million in the same quarter last year.
GAAP gross margin was 34.3%, up from 33.9% in the prior quarter and up from 30.2% year over year.
Non-GAAP gross margin was 35.5%, up from 35.1% in the prior quarter and up from 30.9% year over year.
GAAP gross margin for the solar business was 37.3%, up from 35.0% in the prior quarter and up from 32.3% year over year.
Non-GAAP gross margin for the solar business was 37.8%, up from 35.4% in the prior quarter and up from 32.8% year over year.
GAAP operating expenses were $92.7 million, up 27% from $73.3 million in the prior quarter and up 66% from $55.8 million in the same quarter last year. Operating expenses this quarter include $22.4 million related to the SMRE acquisition and settlement of a pre-acquisition claim against Kokam.
Non-GAAP operating expenses were $63.1 million, up 15% from $54.8 million in the prior quarter and up 40% from $45.1 million in the same quarter last year.
GAAP operating income was $50.5 million, down 23% from $66.0 million in the prior quarter and up 111% from $24.0 million in the same quarter last year.
Non-GAAP operating income was $85.3 million, down 4% from $89.2 million in the prior quarter and up 135% from $36.4 million in the same quarter last year.
GAAP net income was $52.8 million, up 27% from $41.6 million in the prior quarter and up 308% from $12.9 million in the same quarter last year.
Non-GAAP net income was $87.4 million, up 37% from $63.6 million in the prior quarter and up 178% from $31.5 million in the same quarter last year.
GAAP net diluted earnings per share (“EPS”) was $1.03, up from $0.81 in the prior quarter and up from $0.27 in the same quarter last year.
Non-GAAP net diluted EPS was $1.65, up from $1.21 in the prior quarter and up from $0.63 in the same quarter last year.
Cash flow from operating activities was $83.1 million, up from $68.7 million in the prior quarter and up from $46.9 million in the same quarter last year.
As of December 31, 2019, cash, cash equivalents, bank deposits, restricted bank deposit and marketable securities totaled $467.5 million, compared to $432.9 million on September 30, 2019.
Full Year 2019 Summary
Total revenues of $1.43 billion, up 52% from $937 million in the prior year.
GAAP gross margin was 33.6%, down from 34.1% in the prior year.
Non-GAAP gross margin was 34.9%, up from 34.6% in the prior year.
GAAP operating income was $189.9 million, up 36% from $139.4 million in the prior year.
Non-GAAP operating income was $276.8 million, up 59% from $174.3 million in the prior year.
GAAP net income was $146.5 million, up 14% from $128.8 million in the prior year.
Non-GAAP net income was $233.2 million, up 48% from $157.3 million in the prior year.
GAAP net diluted EPS was $2.90, up from $2.69 in the prior year.
Non-GAAP net diluted EPS was $4.44, up from $3.17 in the prior year.
Cash flow from operating activities of $259 million, up from $189.1 million in the prior year.
Outlook for the First Quarter 2020
The Company also provides guidance for the first quarter ending March 31, 2020 as follows:
- Revenues to be within the range of $425 million to $440 million
- Gross margin expected to be within the range of 32% to 34%
- Revenues from solar products to be within the range of $405 million to $415 million
- Gross margin from sale of solar products expected to be within the range of 33% to 35%
Conference Call
The Company will host a conference call to discuss these results at 4:30 P.M. ET on Wednesday, February 19, 2020. The call will be available, live, to interested parties by dialing 800-367-2403. For international callers, please dial +1 334-777-6978. The Conference ID number is 7869140. A live webcast will also be available in the Investors Relations section of the Company’s website at: http://investors.solaredge.com
A replay of the webcast will be available in the Investor Relations section of the Company’s web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.
About SolarEdge
SolarEdge is a global leader in smart energy. By leveraging world-class engineering capabilities and with a relentless focus on innovation, SolarEdge creates smart energy solutions that power our lives and drive future progress. SolarEdge developed an intelligent inverter solution that changed the way power is harvested and managed in photovoltaic (PV) systems. The SolarEdge DC optimized inverter seeks to maximize power generation while lowering the cost of energy produced by PV systems. Continuing to advance smart energy, SolarEdge addresses a broad range of energy market segments through its PV, storage, EV charging, batteries, UPS, electric vehicle powertrains, and grid services solutions. SolarEdge is online at solaredge.com
Use of Non-GAAP Financial Measures
The Company has presented certain non-GAAP financial measures in this release, such as non-GAAP net income, non-GAAP net diluted EPS, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and non-GAAP gross margin from sale of solar products. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.
